In May 2022, the Transatlantic Climate Bridge hosted an essay competition on the topic of just transitions in Germany, the US and Canada.
We will be presenting the winning essays via our blog. This essay, by TCB-Essay Contest Winner Anna-Loreen Mondorf, of Katholieke Universiteit Leuven, presents a taxonomy of Just Transitions embedded in the overarching geopolitical climate context. The essay asks three key questions: What are just transitions? How well-positioned are Germany, Canada and the US to implement such a transition? And, crucially, how can we achieve a just energy transition in a political climate dictated by short-sighted national security interests?
Just Energy Transition
in Canada, Germany and the United States
– a German Perspective –
Putin’s invasion of Ukraine fundamentally changed the (Western) world – its security landscape, political priorities, and policy-making, both in the short and long term. It revealed the global energy landscape’s interconnectedness and Europe’s limited strategic autonomy in face of its import dependency on Russian natural gas, amounting for 41.1% of the EU’s gross available energy derived from natural gas in 2020. Although energy mixes vary widely among EU member states, the effects of the EU’s overall reliance on energy imports are nowadays felt across the Union, as increasing gas prices and heating costs impact most those already strangled by inflation and shortages.
At the same time, the climate crisis continues to increase global temperatures and biodiversity loss. While only a few weeks ago green deals were in the middle of policy-making on both sides of the Atlantic, transatlantic coordination has shifted to focus on short term security interests with long term environmental consequences. Just transition-concepts need to adapt to changing political realities, thereby opening doors for transatlantic cooperation.
Just green transitions
Tracing back to the U.S. labor movements in the 1990s, the concept of a ‘just transition’ originally addressed socio-economic injustices in the face of the societal shift away from fossil fuels. Though generating many environmental and health benefits, this systemic transformation also creates adverse side-effects: low-income households and vulnerable communities may face disproportional burdens due to labor disruptions, increasing energy costs, energy insecurity, and a lack of local tax revenues. Although economies have evolved throughout history, today’s environmental transitions are leading to a new level of fundamental and rapid changes to the global economy.
As an interdisciplinary multi-level and multi-faceted challenge, just transitions comprise a political, socio-ecological, technological, and geo-strategic dimension. Embedded in complex global governance and interconnected market structures, both climate and energy policy are being shaped at local, national, and international levels by numerous state, non-state, and transnational actors. Therefore, current literature discusses environmental and energy justice from a multidisciplinary perspective. While distributional justice refers to a ‘fair’ distribution of benefits and burdens at intra- and inter-state level, procedural justice aims at inclusive decision-making processes. Recognitional justice is committed to recognizing historic and current (power) inequalities, whereas intergenerational justice addresses the irreversibility of climate change and urgency of environmental protection.
Apart from the normativity and complexity of ‘justice’, the transformational objective is to minimize costs, redistribute disproportional burdens by establishing a societal safety net, and seize the transition’s ‘green growth’-potential. Low-carbon transitions must not only be environmentally, but also socially and economically sustainable, aiming at ensuring a worthwhile living within equitable, resilient, and inclusive energy (governance) systems. Never before has access to (affordable) energy been more relevant than today, given Russia’s increasing geopolitical weaponization of energy relations. It highlights the importance of supply security and energy sovereignty as a precondition of the West’s geo-strategic capacity to act security-wise in the short term and to guarantee any form of social-environmental justice in the long term.
As an industrial nation, social welfare state, and global pioneer of the ‘Energiewende’, Germany is particularly responsible for setting transitional standards at the EU and international level. It was one of the first industrialized, coal industry-based states that committed to phasing out nuclear (in 2022) and coal energy (initially at the time in 2038 – with the aim now being even earlier) for environmental reasons. Meanwhile, 190 states declared a ‘phase down’ of coal power at COP26. German workers and communities affected by the declining coal production have thus been supported by governmental action since 1968. Though top-down policies dominated the transition’s early days, public initiatives have focused on a regionalized bottom-up approach since the 1980s. Proactive structural policy, including large-scale investments, and local stakeholder inclusion, successfully contributed to an anticipatory reorientation of former coal regions, such as the Ruhr area and Lusatia. Germany’s comprehensive social safety net and regional fiscal equalization system, though, served as the basis of its just transition policies’ success to date.
Apart from national efforts, Germany’s low-carbon transition is embedded in a complex European regulatory environment. Despite the EU’s limited competences in climate, energy, and social policy, the European Green Deal introduced a paradigm-shift of internal and external policy-making. Following a holistic approach to accelerate the EU’s carbon-neutral transition, the inclusion of local stakeholders, as within Energy Communities, plays an equally crucial role at the EU level, making Germany’s social-ecological transformation inseparable from EU politics.
North-American just transitions
Canada follows a comparably regionalized, although rather recent transitional approach. After committing to the 2015 Paris Agreement, the government announced the phase-out of coal-fired electricity by 2030. Apart from its environmental necessity to reach climate-neutrality by 2050, the transition directly affects at least four provinces, several indigenous communities, and up to 3,900 workers at coal-fired generating stations, which depend on the coal industry’s wages and tax revenues. In an attempt to develop a national strategy based on local realities, a Just Transition Task Force was implemented in 2018, meeting with local stakeholders of all affected areas. Further steps towards just transition policies were taken, including the creation of a Just Transition Advisory Body and the Sectoral Workforce Solutions Program to support changing workforce needs. As the government has not yet realized its announced Just Transition Act, Canada still lacks a federal anticipatory strategy to mitigate its transition’s socio-economic impacts on vulnerable communities. With more governmental action, a just transition is nonetheless possible, given Canada’s comparatively low dependency on fossil fuels as an economic driver and ‘green growth’-opportunities.
The United States’ commitment to net-zero emissions by 2050 similarly impacts its fossil fuel workers and communities, particularly in the West, Midwest, and Appalachia. The latter’s coal production fell by 65 percent between 2005 and 2020 and its respective employment by 54 percent, in overall accounting for 87 percent of national coal-related job loss. Due to structural economic obstacles, job loss in the U.S., however, leads to significantly higher costs than in Canada or Europe. Coal-dependent regions are therefore not only confronted with the environmental and health burdens of decades of mining activities, but also the lack of an overarching social security, health care, and job-retraining system. Given high debt levels and lack of bipartisan support, public investments in the U.S.’ social security system are limited and leave vulnerable groups exposed to market disruptions. Paradoxically, economic development incentives may have even further contributed to socio-economic disparities between regions and economic actors, as studies find that large corporations benefitted repeatedly and considerably more than small local businesses from their allocation. Thus, in need of an integrated just transition-strategy and policy coherence for sustainable development across the U.S., the Biden administration prioritized environmental justice by establishing a White House Working Group on Coal and Power Plant Communities and Economic Revitalization with a particular focus on supporting Energy Communities.
Transatlantic just transitions in changing geopolitical times
Whereas Germany’s sub-state just transition-policies are embedded in its social welfare state structures, both Canada and the U.S. are lacking a comprehensive social security system that can mitigate the green transition’s side effects. Without coherent just transition-policies, vulnerable workers and communities are in danger of being further left behind. Just transition strategies must therefore be seen in a broader policy context and take existing social security challenges into account, a need further heightened by the fact that the communities most affected by the green transition are also those most impacted by the war in Ukraine and its socio-economic consequences. By scaling up low-carbon technologies and making regionalized just transition-policies a priority at, for example, the US-EU Energy Council, bilateral partnerships such as the German-US Climate and Energy Partnership, in G7 discussions and at other multilateral fora, transatlantic coordination can effectively speed up green transitions across borders and help the most affected regions adapt to changing political realities, while drawing from one another’s lessons learned.